M/s N Vensimal Securities Ltd. Versus ACIT-4 (3) , Mumbai

2014 (9) TMI 1143 - ITAT MUMBAI

Penalty u/s. 271(1)(c) - claim of bad debts under section 36(1)(vii) r.w.s.36(2) rejected - Held that:- When the issue is debatable and substantial question of law has been accepted by the Hon’ble High Court, no penalty is leviable. This issue is squarely covered by the decision of Hon’ble jurisdictional High Court in the case of M/s Nayan Builders & Developers Pvt. Ltd. (2014 (7) TMI 1150 - BOMBAY HIGH COURT) wherein it was categorically held that mere admission of appeal by the High Court is s .....

AR placed on record, the order of Hon ble Bombay High Court dated 30-11-2011, wherein the substantial question of law has been accepted. As per learned AR, in view of the decision of the Hon ble jurisdictional High Court in the case of M/s Nayan Builders & Developers Pvt. Ltd., dated 24-7-2014, wherein it was held that once the substantial question of law is accepted with respect to addition so made, no penalty should be imposed u/s.271(1)(c) of the Act. 3. Learned DR relied upon the orders .....

aim of ₹ 74,54,700/- as income, in the Profit and Loss Account under the head other income‟ in the A.Y.2003-2004 ? When the issue is debatable and substantial question of law has been accepted by the Hon ble High Court, no penalty is leviable. This issue is squarely covered by the decision of Hon ble jurisdictional High Court in the case of M/s Nayan Builders & Developers Pvt. Ltd. dated 24-7-2014 (supra), wherein it was categorically held that mere admission of appeal by the Hig .....

as under :- 3. It is, therefore, abundantly clear that the additions in respect of which penalty was confirmed have been accepted by the Hon'ble Bombay High Court leading to substantial question of law. When the High Court admits substantial question of law on an addition, it becomes apparent that the addition is certainly debatable. In such circumstances penalty cannot be levied u/s 271 (l1)(c) as has been held in several cases including Rupam Mercantile Vs. DCIT [(2004) 91 ITD 237 (Ahd) ( .....